This week, the first two defendants from those firms are set to face trial in Manhattan federal court, as the U.S. continues its unprecedented five-year-old investigation of market corruption at hedge funds, technology companies and consulting firms.

Level Global co-founder Anthony Chiasson and Todd Newman, a former portfolio manager for Stamford-based Diamondback, are accused of making more than $67 million in illicit profits by trading on inside information in Dell Inc. and Nvidia Corp. U.S. District Judge Richard Sullivan will preside over the trial of both men, who have pleaded not guilty.

The case is the latest chapter in a series of probes that last month yielded a two-year prison sentence for their highest profile target, former Goldman Sachs Group Director Rajat Gupta.

Gupta, a Westport resident convicted of insider trading, conspired with Raj Rajaratnam, Galleon Group co-founder. Rajaratnam, who is serving an 11-year term, has asked an appeals court to throw out his conviction, arguing wiretaps used in his case were illegal.

Prosecutors in the office of Manhattan U.S. Attorney Preet Bharara have said Chiasson and Newman were part of a group of fund managers, analysts and technology company employees who traded stock tips in a conspiracy that operated from 2007 to 2009.

"This case describes a tight-knit circle of greed on the part of professionals willing to traffic in confidential information," Bharara said when the charges were announced in January. "It was a circle of friends who essentially formed a criminal club, whose purpose was profit and whose members regularly bartered inside information."

Of the eight people charged in relation to this case, six have pleaded guilty to insider-trading and are cooperating with the U.S. They include Jesse Tortora, a former Diamondback analyst; Spyridon "Sam" Adondakis, an analyst at New York-based Level Global; and Danny Kuo, a former analyst at Whittier Trust Co., a South Pasadena, Calif.-based wealth-management company.

Jon Horvath, a former technology analyst who was arrested with Newman and Chiasson, pleaded guilty on Sept. 28. During his plea, Horvath, who worked at a unit of Steven Cohen's $14 billion Stamford-based hedge fund SAC Capital Advisors, admitted passing nonpublic information to his portfolio manager and is cooperating with the U.S.

In September, Horvath's portfolio manager, Michael Steinberg, was put on leave after he was identified by two people familiar with the matter as an unindicted co-conspirator in the case. Steinberg hasn't been accused of any criminal wrongdoing. His lawyer, Barry Berke, has declined to comment on the case.

In a series of pre-trial motions, prosecutors and defense lawyers showed the depth of information gathered by the U.S. in the case, including wiretaps and consensual recordings made by some of the co-conspirators at the direction of the FBI.

Lawyers for Chiasson and Newman sought to use recordings involving cooperating witnesses, including Tortora, who will testify against their clients. Newman's lawyers told Sullivan at an Oct. 23 hearing that they expect Tortora will be the government's first witness. The trial, which had been scheduled to start Oct. 29, was delayed by the courthouse's closing after Hurricane Sandy.

Stephen Fishbein, one of Newman's lawyers, argued that the recordings should be heard, saying Tortora's credibility "will be at issue." The tapes contain statements that indicate Tortora "intends to blame Mr. Newman for anything he has done wrong," Fishbein said.

Prosecutors objected to Tortora's calls being played, calling them "an undercover ruse set up by the FBI," prosecutors said in court papers.

"Members of the jury may object to the notion that the FBI is recording individuals without telling them, or that cooperating witnesses engaged in deceptive behavior at the direction of the FBI, even though these are entirely permissible law enforcement techniques," prosecutors said in an Oct. 22 filing.

The defense seeks to play several calls, including a Dec. 1, 2010, call from Tortora to Kuo. Tortora, who had already agreed to cooperate with the government by that time, telephoned Kuo at the request of the FBI, a week after agents had raided Tortora's fund.

"What's happening, man?" Tortora asked during the call, according to a transcript prosecutors submitted to the court.

"Dude, is your phone tapped?" Kuo replied.

"Wait, is the phone tapped?" Tortora asked, adding, "Why do you ask that?"

"Uh, because I saw on the news" Kuo said, "that you and Todd are, uh, being investigated."

After Kuo and Tortora discussed defense strategy to explain their trades were made after legitimate research, Kuo concluded the call with a final warning to Tortora about making future calls from a personal telephone, according to the transcript.

"I would seriously invest in some quarters, and start calling from 7-Elevens," Kuo said.

At a hearing last month, Judge Sullivan didn't rule on the government's request, saying he was "skeptical" about the admissibility of the recordings. He said he wouldn't issue a final decision on them until the trial.

Prosecutors alleged that Kuo knew an unidentified insider at Nvidia who gave him information about the technology company's financial results, which he passed on to friends, including Adondakis, Tortora and Horvath.

The government claimed that Tortora passed tips on Nvidia to Newman, who traded on the information while Adondakis provided illegal tips to Chiasson, who then traded on the information. Chiasson allegedly earned $10 million from May 2009 Nvidia trades while Newman earned about $48,000.

Bharara alleged that Sandeep Goyal, who once worked at Dell, was part of a second scheme which involved the PC maker. According to the U.S., Goyal who worked as a technology analyst at Neuberger Berman, knew an unidentified person in the Dell investor-relations department who gave him secret earnings information on the company.

Prosecutors said Goyal twice passed the information to Tortora, who then tipped Newman, earning his fund about $3.8 million in 2008. Tortora shared his Dell tips with Adondakis, who passed that information to Chiasson, prosecutors said. As a result, Level Global and Chiasson earned at least $57 million in 2008 from illicit information, the U.S. alleged.

Goyal has also pleaded guilty and, like Kuo, Tortora and Adondakis, is cooperating with prosecutors.

Fishbein and John Nathanson, Newman's lawyers, and Greg Morvillo and Reid Weingarten, lawyers for Chiasson, declined to comment on the trial.

Diamondback agreed to pay more than $9 million to resolve a Securities and Exchange Commission lawsuit over trades made in 2008 and 2009 by Newman and Tortora.

In January, Diamondback and Bharara's office entered into a non-prosecution agreement related to the actions of the two men. Prosecutors said the alleged misconduct "was not known by" others at Diamondback.

According to the government, a lawyer hired by Diamondback concluded in a separate inquiry that some trades by Newman and Tortora in Dell and Nvidia resulted from material nonpublic information they received from an unidentified expert-networking firm. The lawyer's probe found "no evidence that either the conduct or the improper information" was known by the firm, prosecutors said.